Sunday, July 17, 2011

Court order goes against Doctrine of Separation of Powers: Centre

The Centre, while seeking to recall/modify the July 4 Supreme Court order on the black money issue, has disputed the finding that certain admissions and concessions were made by the government counsel during the course of hearing of the petition filed by the former Union Law Minister, Ram Jethmalani.

On July 15, the Centre filed an application for recall of the order (briefly published on July 16). According to the application (a copy of which is obtained by The Hindu), “The order proceeds on the admission, concessions, statements and acknowledgements attributed to counsel appearing for the Union of India. Such concessions, statements, admissions and acknowledgements do not appear to have been made and, therefore, the order proceeds on an incorrect factual basis.”

“Without jurisdiction”

It said: “The order is without jurisdiction in as much as it impinges upon and goes contrary to the legally well-established Doctrine of Separation of Powers. It is contrary to the settled legal principle that the function of the court is to see that Lawful Authority is duly exercised by the Executive, and not to take over itself the tasks entrusted to the Executive. It impinges upon the well-settled principle that courts do not interfere with the Economic Policy, which is in the domain of the Executive and that it is not the function of the court to sit in judgment over matters of Economic Policy, which must necessarily be left to the expert bodies. Courts do not supplant the views of experts with its own views.”

The Centre said: “The order impinges upon the principle that in matters of utilities, tax and economic policy, legislation and regulation cases, the court exercises judicial self-restraint if not judicial deference to the acts of the Executive, since the Executive has obligations and responsibility both constitutionally and statutorily. The discussions of economic theories and the wide-ranging criticism of the state in paras 1 to 20 are uncalled for, unjustified and made without any discussion in court or material therefore.”

The order “has the effect of completely eliminating the role and denuding the constitutional responsibility of the Executive, which itself is answerable to Parliament, and it directly interferes with the functions and obligations of the Executive, more particularly, since it is ordered that the Special Investigation Team will report directly to the Supreme Court, therefore excluding the Executive, and consequently Parliament also.

Steps taken

Explaining the steps to recover black money, the Centre said: “The government has detected an unaccounted income of Rs.18,750 crore in the last two financial years alone, due to focussed search and seizure operations by the Income Tax Department in India. The sharp focus on mispricing, which is one of the main and new methods of transfer of illicit funds outside the country, has resulted in detection of mispricing of Rs.33,784 crore in the last two financial years, as against detection of mispricing of Rs.14,655 crore in the previous five financial years. The special attention on cross-border transactions and business deals has resulted in collection of taxes of Rs.22, 697crore in the last financial year.”

On steps to retrieve black money stashed away abroad, the application said: “India has initiated the process of negotiations with 74 countries to broaden the scope of the Article concerning Exchange of Information to specifically allow for exchange of banking information and information without domestic interest. As on date, it has completed negotiations with 19 existing DTAA countries to update this Article. These agreements have also been initialled. Eighteen new DTAAs have also been finalised where the Exchange of Information Article is in line with international standards.”

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